Magazine article American Banker

Obama Signs Law Easing Access to Credit for Small Banks, Businesses

Magazine article American Banker

Obama Signs Law Easing Access to Credit for Small Banks, Businesses

Article excerpt

Byline: Kevin Wack

WASHINGTON a President Obama signed legislation Thursday that will remove impediments faced by some small banks and other businesses as they seek to raise new capital.

The law passed Congress with strong bipartisan support, overcoming a late backlash from consumer groups and some congressional Democrats who say that it will weaken investor protections and open the door to more financial fraud.

During a Rose Garden signing ceremony, Obama did not address that criticism, though he did warn congressional Republicans who were in attendance that the Securities and Exchange Commission needs to get proper funding from Congress.

Obama's remarks focused largely on America's legacy of entrepreneurialism a he invoked the names of Thomas Edison, Alexander Graham Bell, Bill Gates, Steve Jobs and Mark Zuckerberg a while touting the law's crowd-funding provisions, which will allow start-up companies to raise money online from small investors.

"For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in," Obama said.

The part of the new law that most directly affects small banks is an increase in the threshold that requires banks to register with the SEC from 500 shareholders to 2,000.

That provision figures to save some small banks money. According to the Independent Community Bankers of America, SEC registration costs small banks approximately $100,000 in the first year and about $50,000 in each successive year.

The law also boosts the threshold that triggers bank de-registration from 300 shareholders to 1,200. …

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